On of the most viewed Blog entries was the one about Brad Stinn and Friedman’s Jewelers.

Pump up those sales! We’ve got to make the quarter! How often are those command heard and how tempting is it to make the wrong choices in order to please the investing public and Wall Street?

Following six weeks of trial – Bradley Stinn, age 47, – former CEO of Freidman’s, Inc. and Crescent Jewelers, found himself being convicted of securities fraud, mail fraud and conspiracy. Likewise, in addition to Stinn’s conviction, the former CFO, Victor Suglia and form Controller, John Mauro have entered guilty pleas into what was a massive accounting fraud.

Having been found guilty, the wheels of justice in the federal system move slowly at times. Many have wondered just what outcome would befall Brad Stinn who some hated and others sympathized with. Well, today the verdict has been handed down.

His sentence:

12 years in federal prison

3 years probation

$4M restitution

He should report sometime in the next 60 days

Speaking from experience, Stinn will be required to serve 85% of his active sentence, which means that he’ll serve 122.4 months – which is a long time!

US Attorney’s New Release:

Bradley Stinn, the former Chief Executive Officer of Friedman’s Inc. and its affiliate, Crescent Jewelers, was sentenced today to 12 years’ imprisonment for securities fraud, mail fraud, and conspiracy. On March 24, 2008, following a six-week trial, a federal jury in Brooklyn convicted Stinn on all counts in the indictment and returned a forfeiture verdict against him in the amount of $1,019,000. The trial and sentencing proceeding were held before Senior United States District Judge Nina Gershon.

The sentence was announced by Benton J. Campbell, United States Attorney for the Eastern District of New York.

During the period of the conspiracy, Friedman’s was a national jewelry chain whose shares were traded on the New York Stock Exchange. The evidence at trial established that Stinn led a multi-year securities fraud scheme that inflated Friedman’s reported financial performance and hid from the market the serious problems the company had collecting money owed for hundreds of millions of dollars of jewelry that it had sold on credit. As part of the scheme, Stinn and his co-conspirators repeatedly lied to shareholders and the investing public about Friedman’s financial performance, made false and fraudulent representations to Friedman’s auditors, and manipulated the company’s accounting in order to prevent auditors from discovering the falsity of Friedman’s financial statements. As found by the court at sentencing, Stinn’s fraud scheme resulted in Friedman’s shareholders and other victims of the scheme losing more than $20 million.

Several months after the announcement of the government’s investigation in November 2003, Friedman’s stock was de-listed from the New York Stock Exchange. Friedman’s ultimately filed for bankruptcy in January 2005.

As always, this blog is open for comments.

Do you think that this sentence is fair?

Would you, if you had the opportunity to serve on a jury, have given Brad – more, less or this amount a punishment for his guilty plea?

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I think something went terribly wrong here. O.K., Brad played a fast and loose game but he is not a career criminal. Sterling, Brad and their third partner should pay restitution to the shareholders, each serve a year and get 7 years probation.

Since the indictment, my speculation on the sentencing was always would they set a stiff one for Brad as an “example” message to the white collar business community?

The example message became irrelevant earlier this year when the entire banking community brought our economy to its knees via premeditated and systematic theft. Not to mention the investment community criminals who stole the 401k savings of an entire generation.

The management at Spiegel was busted by the SEC last year for hiding their bad credit portfolio to artificially pump up their stock value (correct me if I am wrong, but not materially different from Brad’s crime). Each of three people were fined about $160,000 and slapped on the wrist.http://www.sec.gov/news/press/2006/2006-184.htm

Brad had the ability and business acumen to clean up his mistake, and then contribute something of value to the population at large. He should have been sentenced to build a self-sustaining charity enterprise under the close watch of the Fed.

Brad has the talent, and I believe the will, to contribute something of value in compensation for his past actions. The 12 year sentence denies him that option. When it is served he will probably spend his remaining years in isolation and shame.

Why break a man who could have been an asset to the community at large?

I am not a relative, nor do I hold him in blind admiration. At times he could be pompous and self serving, he was caught up in an illusion. That part of his character has long since vanished. Some of us hate him out of envy and that is not a 12 year crime.

The scales of justice are way out of balance in this sentence. The court should have decided restitution, long term probation and rehabilitation. He would have made good on it.

When asking for comments from your readers regarding the length of the sentence for Mr. Stinn, you published the following question: “Would you, if you had the opportunity to serve on a jury, have given Brad – more, less or this amount a[sic] punishment for his guilty plea?” Mr. Stinn did not enter a guilty plea. Rather, he was convicted.

He would have been great to run the JFC charity and raise millions for kids. They should have made him report to weekend camp and whatever he earned as the salary from jfc would go into a account to be paid towards the $ sentence.

To all…I would like to think that the thoughts of rehabilitation and public service would be logical and effective, but alas you do not know the reality of the American prison system.

Prison is a business. Businesses require inventory. Brad is there inventory, just like I was when I was incarcerated.

There is no focus on rehabilitation or use of prisoners for the greater good. If that were the case, then inmates would be used as employees for public service projects and/or allowed to effectively use their skills to create for the benefit of others. But, again that is not the purpose of being incarcerated.

Prison is to be punishment and is designed to reduce the inmate to the ones lowest common denominator – you are a number only.

Keep in mind, in order for the checks and balances to work, prison is to be a dreaded place. A place to be avoided. Anything other than work at 12 cents per hour might thwart the dreaded purpose of prison.

Brad, a person with many qualities and gifts, will find that 12 years is an eternity and will get out a changed man. My time was much less and it was profound and life changing.

I personally feel for Brad and his family. I do not condone his actions, but, nonetheless, I still can feel compassion for them.

“Brad had the ability and business acumen to clean up his mistake”….Really? Well, it’s a shame he didn’t use that acumen when he was knee deep in his own deception WHEN he was still at Friedmans. I can tell you…he had NO intention of doing that…he was all about the numbers….he would scream at his direct reports (COO, CFO) to get whatever result he needed…damn the consequences.

“He should have been sentenced to build a self-sustaining charity enterprise under the close watch of the Fed.”…Are you kidding me? This amounts to a slap on the wrist. So, defraud investors for 20 mil, and get probation and work on a charity…Hmmm, sounds good…I would take my chances with that.

“but he is not a career criminal”….Maybe not, but he built a career acting like one. He knew what was going on…every day. I oftened wondered what he Vic discussed before those investor conference calls, knowing the truth of that portfolio.

In my business career, I never saw anyone in such a high position that had such disregard for other people…in fact, I remember once at a manager’s meeting when he said to a large group of store manager’s: “If I could run this company with just a laptop, I would”…now, I know he was trying to tell us about the importance of saving money, and maybe needing us (unwillingly)…but instead he told us I wish I could run this company without you!
Hard to believe the support for Brad on all the posts I read comes from people who knew him outside of work.

He destroyed many families with out remorse He put himself above the entire world,12 years is nothing compared to the countless peoples lives he personally and purposely ruined and sat in his office in oakland and bragged about grown men crying because he ruined them.well hope the tears in his family fall equally as hard.Then after he serves his term.I shall forgive and forget.I am still a little baffled as to why Randy Poe never came up in this mess

Give me a break…just because someone has remarks that seem unkind does not mean they are harboring anger…I for one have long since moved on…
I was commenting on what seemed to be misguided comments on your part…We’ll just have to agree to disagree

And, no, I’m not jealous of Brad Stinn or his temporary success or anthing else…comments that are not in favor of Brad doesn’t equate to jealousy

Certainly Brad made many mistakes. He is after all a human being. His personal life is a totally separate issue from the charges he was convicted and sentenced for. Yes, his decisions were morally, legally and ethically wrong. He knows what he has done and will pay dearly for those actions. I think 12 years is absurd, in this day and time, when money institutions are falling rapidly, for some of the exact same practices. Had he pled guilty from the onset, and accepted responsibility for his actions, his sentencing probably would have been much more leinient. His preceived arrogance in the court room, was probably a game face, at the advice of his attorney. We all make mistakes,but most of our mistakes do not affect the lives of thousands.

To Once a friend…Brad is a convicted felon, pure and simple. Decent human beings do not do what he did. He gave a rat’s ass about no one, and cared less how his actions affected others. The fact that he was a despicable, arrogent, human being is not crime, screwing thousands of people out of millions of dollars is, including both employees and vendors, not to mention investors. Phil and Sterling should be joining him in prison. Brad knew what was was right, but he chose to take a different path. Yes, we all make mistakes, but we are all not thieves. Contrary to Gordon Gecko’s mantra, greed is not good.

Now that Brad is facing 12 years, there’s a chance that the DOJ may get him to rollover on Sterling or Phil in exchange for a reduced sentence. I suspect that the one year elapsed time between Brad’s conviction and sentencing was due to negotiations between Brad and the DOJ in hope of Brad testifying against Phil and Sterling.

That type of negotiation always takes time. Brad probably wanted probation without jail time if he testified. The DOJ undoubtedly wanted some prison time. Ultimately, they couldn’t reach an agreement and sentencing had to go forward. The DOJ was fortunate to get a 12 year sentence for Brad, so they once again have bargaining ability.Fortunately, Brad’s sentence is long enough that he will still serve a few years even if they get him to testify for a reduced sentence.

This may also be why Vic hasn’t been sentenced yet . . . they will need his testimony also. Once Vic is sentenced, the story is over. I hope they can get Sterling and Phil on conspiracy charges.

All of you who knew what was going on should have reported it then……not now, hiding behind some alias on the internet. SHAME ON ALL OF YOU!!! Brad does have a family and I’m sure their lives are ruined as well, based on some of your comments, it seems as if that’s what make some of you happy. If so, your problems are much worse than Brad’s…….may god have pitty on our soul for being such spiteful human beings!

L.S Anger yes without a doubt,But Envy or jealousy not a bit From the day I met Brad I felt sorry for him he was insecure and weak,he took it out by making everyone he met feel bad about themselfs,As far as calling anything associated with a narcisistic crimal as success is wrong. He failed in every aspect of life.He ruined Crescent jewelers,He stole and cheated money from employees and investors He got caught and sentenced to a fair term.

The Federal Marshals determine where Brad goes. The judge may suggest but I don’t think it matters. Somewhere in California I am sure where a bed becomes available for the level he will be assigned to, i.e., low security, medium, or oamp.

After reading all these posts, I feel it is important that some perspective on the failure of Friedmans/Crescent is shed.
While Brad and his ilk were corrupt, and no doubt, they ran both companies into the ground, the Hedge Fund that bought Friedman’s and the management of Sam Cusano and Pam Romano, (that ultimately took over Crescent unfortunately) was riddled with incompetence, poor perspective, and just really piss poor leadership.
It seems like Cusano and his apathy basically let Romano run the show…and she was anything but smart about it. Why they hired her after a previous well known failure at Zales is a mystery. To list her inabilities, mistakes and overall idiocy would require a separate blog…amazingly, see managed to bring on a group of persnal lap dogs that helped carry out her failures.
So, both the Friedmans and Crescent ship took the torpedo of corruption and poor ethics from Brad and his CEOs/COOs…and started to sink.
Then it took another, final torpedo of incompetence and egotism…which finally sunk it. Such a shame…
Companies that managed to survive the Depression, World War II, and multiple recessions were taken down by short sighted, greedy, stupid people who only had their own best interest in mind…to hell with the companies.

Well, it seems that you and I were in the same place at the same time, simpatico. The last management crew was a disaster.

But I believe also that there is a more interesting picture developing in this string, and it is a very primal human conflict of deeds versus perception.

Clearly the SEC has jurisdiction within a legal framework to investigate and punish the deeds of crooked investment managers. On the contrary, having an arrogant personality is not a crime and should not affect the sentence term (which in this I believe it did). Hating someone is not just cause for a trial against the defendant.

You asked whether, if given the chnce to sit on the jury, would you have sentenced Mr. Stinn to the sentence he received…or whether we would have been more generous had he pleaded guilty.

Fortunately, that simply wasn’t our job. We listened to the facts, applied them to the legal definitions of fraud and conspiracy, and rendered the verdict. We weren’t responsible for making recommendations for punishment – other than restitution.

If Mr. Stinn had pled guilty…there wouldn’t have been a trial, only sentencing by the judge.

Spoke with Brad the other day – he really does not believe he should have been convicted. I don’t know the full details, but I get the sense he is not taking ownership on what he was convicted of doing. He seems to think he will stay out a long time while this is under appeal.

I have read all of your comments and the key here is that the DOJ went after him with a vengence. The judge was not impartial and she did not manage the trial well at all. You will see, the appeal will prove her bias and failure to follow procedural rules. This hopefully will be a lesson for the DOJ.

After reading the responses and a former employee of Crescent – my two cents is the demolishing of two family companies that were in business for over 70 years and the need to raise capital.

Selling your soul to some investment companies – they take over and replace “Steve Graber” Crescent with thieves.

When you hear about in-breeding think of Crescent – the new cfo – elevated to president came from E & Y auditing firm – who was suppose to protect investors by evaluating the books. This esteemed person – cooked the books and was thrown out before the xmas season. Replacement from the big Citi Bank lasted about 8 months – then a new president Brad.

I am not naive about Brad, but my working relationship was not subject to screaming and making folks look foolish. Of course I was not around everyday or attend all of his meetings, but I was there for six years – should have seem this side of him.

From the poor decisions “giving some slack” meeting the expectations of the investors and Phil Cohen the real puppet master pulling the strings, Brad got caught up in money. His family will suffer and Brad has to carry that weight for a long time – will never live it down.

Time in prison is subject to the judge so who am I to say right or wrong. I do know that hundreds of former employees were hurt by greed and sad to say it will continue – today and many tomorrows.

That is the sad state of life today, as you can see responses that no one wants to take the blame – point fingers – or say “heck look at the banks, AIG etc.”

wow….looks like an easy 12 for the guy who took away so many lifes….countless families….homes were ruined….and your wondering if 12 is fair. And how did The Famous Edgar Allen Poe manage to run away and avoid the same fate??? Both were always hand in hand making everyone feel so little and worthless…as they screamed get it done or you’ll be done!!! Motivation by intimidation was there only management skill!!!
I say give him 25…and get the rest too!!!

I find it interesting that some of you who are saying that Brad ruined your life are some of the same people who he took a chance on and gave you the opportunity to grow your careers. You had jobs and bonuses and opportunity because he believed in you and took a chance on you. Yes, you’ve lost it but you wouldn’t have had it at all if it weren’t for him. Don’t believe me? Where are you now, without him?

That is one of the most misguided, absolute asinine things i have ever read on any message board regarding Brad and his trial. Are you really suggesting that Brad personally hired all of the few thousand employees that worked for Crescent/Friedman’s? Or that he even had anything to do with those hires?
And a lot of the employees (including myself) were on board BEFORE Brad took over as CEO…I don’t owe my career to him, as don’t many other former employees.
“Where are you now, without him?”….(rolls eyes).
I know you have to take these blogs with a grain of salt…but please think your comments through before posting.

I have to laugh at these comments made by The Bay (perhaps a family member, most probably a person lacking the brain power to light a flashlight bulb).
Brad wasn’t interested in growing anyone’s career…and, speaking for myself, the only thing Brad allowed me to do as a manager was sell massive amounts of jewelry to people on credit who couldn’t pay for it. I thank him for that I guess…I personally made a lot of money on his fast and loose business model…I knew it wouldn’t last…I knew there was an iceberg ahead the way these idiot supervisors and VPs screamed for sales and could care less about doing it with crappy credit customers.
If you think for a second Brad didn’t know about it…I guess I got a a few briges to see ya!

to “the bay says” I find it hard to believe your comment.Where am I without him? I know that I am in a better place – working for a man that is honest, treats his employees with respect and doesn’t cheat his stockholders. What a concept!!!

Brad is one of the greatest people i know. I have know him as a CEO/leader and personally. All of you guys writing bad things about him did not know him one bit. Not everyone likes there boss and you guys are those people that didnt like Brad. For some reason you had something against him or you were just jealous of him. The ones that do like him, do not bother to write on these blogs, cause frankly its PATHETIC. The trial was not fair and the judge was not impartial. He is not guilty of any crime, except for trusting people like Vic. If he was involved in such a scheme why didnt you say anything while it was going on? You hated him right? Or were you just afraid?

I am not writing bad things as you say – I am only writing the truth. I worked with Brad, Vic and John. I sat in on the conference calls, I was aware of the credit issues, and on and on. Being jealous of him??? No, I feel sorry for him. More so I feel sorry for his children, knowing that their father will never be a part of important things in their lives due to his greed. I don’t hate him – no his feel sorry for him.

You say you know Brad? I worked with Brad for 10 years. You say his personal life was different than work? We worked 7 days a week 12 hour days and then got sent to the bar to further “Bond”. I traveled with Brad I drove Brad around I toured with Investors I saw the spinless suckups brought in to further enable Brad I have seen Brad beat people down just for “fun” If anyone remembers during the Friedman’s deal the suicide? And Brad laughing? This guy loved playing as a god How does Mark Pickups family feel about Brad?

Jill Stinn Yes you are out $4M of play money but you still have the SF house and Healdsberg why would you defend someone so wrong ? I am sure you are not driving an old VW like when you first came out here but many people lost everything thanks to this great guy

I think Anonymous and The Bay are the same people. There are quite a few idiot, dedicated Brad followers who think, for some reason, that the judge convicted Brad and not the Jury of 112 people. Oh well, what are you gonna do?

Murders and rapists frequently recieve less than five years in prison. I cannot help but think that this firm sentence is a product of both the subjective perception the judge formed of the defendant as well as the backdrop (a failing economy and the world’s biggest ponzi scheme) that helped mold this perception.

Perhaps…especially with Madoff getting 150 years today…
Obviously, this is the wrong time to be convicted of defrauding investors…but, at the same time it needs to be stopped, and if a stiff sentence is what it takes, then so be it. Brad did defraud investors out of $20 mil…that’s substantial.
I actually think your post says more about the leniency of the sentences of rapists and murderers than the severity of white collar criminals.

Good thing this blog exists: it seems to act as therapy for lots of folks. Getting it all out is a good thing. Once the venom is gone, you can get beyond this. I guess a lot of therapists are out a lot of money!

This judgement is symptomatic of our country– justice is arbitrary. When an NFL player commits murder driving drunk and is sentenced to 30 days (yes murder) and a man who turned down a plea bargain to state his innocence, then is sentenced despite the facts and jury conduct to 12 years (not within 500 miles of his home which is standard except in this case!) –that tells you what is happening here. This is not justice, this is vengeance. Wouldn’t it be logical to require Brad Stinn to work and pay back investors instead of wasting the man’s acumen,intelligence and my tax paying dollars? I think yes.

1) 20$ Million lost from common stock investors in Friedman’s
2) About 50$ Million lost of Phil and Sterling’s initial investment in Friedman’s
3) an additional 20$ million lost from their investment in Crescent
4) All of the salaries at Friedman’s, Crescent, Morgan Schiff

I am surprised that Phil and Sterling haven’t attacked Brad (probably because brad would kick their asses)

They put him in charge of one of their investments, and they ended up losing about 70$ mil and their private equity company

I mean its their fault for believing his results; sort of like what happenend with madoff investors, when someone’s making you a lot of money there seems like there is no way anything could be going wrong.

I don’t really feel that much pity for them though, maybe now people have learned to be more realistic.

My understanding is that Brad was offered the choice of pleading guilty and receiving no jail time – but chose to go to trial as he felt he could not plead guilty to something he did not do. i am also under the impression that others were offered a plea bargain to testify against Brad. Any comments regarding this?

I remember well one Xmas week when I, as store credit manager, turned down a customer for a $5,000 diamond bracelet. The sales girl got TO’ed and went to the store manager! He took it to Bob Morris(Big Dog at the time) and Bob said to approve it! I said sorry sir, the guy is CURRENTLY in a bankruptcy and I can not do that! I will not put my signature on it! He said he would sign and it was my job to make sure he paid! The guy never paid, I took it to court, and the judge allowed the guy to keep the jewelry because we never should have given it to him! That is what it was like in the trenches!

If they could walk in the store and fog up a mirror they were approved for credit…..And then send us out to beat the streets and find the deadbeats.
I loved my job and made good money and wanted to be able to retire from there….I was shy of 8 yrs when they went into liquation, this was Friedmans in Tennessee.
Never met Mr Stinn, but once they filed the first bankruptcy I knew we were done, and I agree about Romano and crew, they didn’t have a clue.

I worked for crescent/friedman’s corporate.. started about 6 months before the investigation started and left a few years later. Brad, Vic, and a few others were all well aware of what they were doing and were intentionally misleading everyone. What bothers me is the rest of the people involved didn’t get penalized..I still have emails from Brad telling everyone to shred all documents citing the HIPPA law. (note, health care law has nothing to do with financial statements…)

Let me give you a little insight into Brad. I worked as a risk consultant on a project for the firm, right after Crescent took
over Friedman’s. I was working with their risk manager in
Savannah; he was a simple, middle-aged guy, not an expert
in math or statistics by any means. At that time he used a
mechanical adding machine, and all customer payment records
were kept on index cards. this was in ’92 or ’93.

Brad Stinn, a young go-getting New Yorker from the investment bank that took over Friedmans became his boss. He rode that poor
guy without end, demanding complicated updates that this poor man couldn’t possibly do, like explaining statistical concepts from the project. I offered to help, but Brad wanted to “make” him do it.
In the Winter of that year, right around Christmas, that poor, sad man took a last glass of scotch and blew his brains out.

I considered Brad directly responsible for driving that man over the edge. If he wanted to fire him, he could have, but there was a vindictiveness to his behavior that has stayed with me to this day. There is such a thing as karma, and I’m sorry to say that Brad put himself where he is today. I shed no tears for him. This can all be verified – it is completely factual.

This is a very interesting thread. I went to high school with Brad, he was hated by about 95 percent of the students as an arrogant SOB, and the other 5 percent were toadies were fawned on him in the hopes of riding his coattails.

His father was a sleazy and gigantically obese car salesman who used to run television ads offering credit to people on welfare and ADC. He went bankrupt eventually, and got into trouble with the feds when he tried to transfer assets into his children’s names. He even went into hiding at one point, and was caught out when he made the mistake of being interviewed by a man-on-the-street reporter during the San Francisco earthquake of 1990.

All of you seem to have this horrible stories about Brad Stinn– it’s interesting to me that those of you writing them are so tedious in your detail just to try to prove that he is an all around bad guy. Well guess what, I have news for each and every one of you. There is no such thing as an all bad or all good guy. We as human beings are a mixture of the two. And I just hope to God that if everything didn’t go as you planned at one point or another, people would not be as cruel. Why don’t you try something new, and kill with kindness? You never truly know the shoes one walked in. There is that saying that if given the chance, many would initially trade places with another but only briefly, because the grass truly isn’t brighter on the other side. I don’t even know Brad, but I am truly sorry for anything he has done to hurt you. Do you know what his kids must feel like? The man is paying the price for his crime. Now lay off. And I challenge you to lay down at night with a healthy conscience that you are trying to be the best person you can be. God bless.

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